The IOC will adjudicate on an “embarrassing” cash row between London 2012 organisers and leading officials of the British Olympic Association that threatens to overshadow preparations for the Games.
In the week before tickets for the Games go on sale, the IOC confirmed yesterday that it had been asked by the BOA to intervene in a dispute with the London Olympic Organising Committee (Locog) about the share of any profit from the Games.
The BOA’s request follows an admission last week by its chief executive, Andy Hunt, that it faces a budgetary shortfall of about £5 million next year.
The funding gap, if not closed in the next 15 months, would force the BOA to downgrade plans to send 550 athletes to the London Games, the biggest team in a century and 245 more athletes than travelled to Beijing. IOC insiders are said to be bemused by the public spat, which has been escalating behind the scenes since 2009. One described it as “very embarrassing”.
Tensions are common between host National Olympic Committees (NOCs) and organising committees but the IOC has never been forced to step in. Such is the deterioration in relations that Lord Moynihan, the BOA chairman, is threatening to take Locog and the IOC to the Court for Arbitration in Sport in Lausanne.
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Moynihan, elected three months after London was awarded the Games in July 2005, has long had complaints about the terms of a joint marketing agreement with Locog, worth £27 million over seven years that was negotiated by his predecessors.
Under an IOC formula, each host NOC must hand over the rights to the Olympic brand to a local organising committee, which uses them to sell sponsorship and merchandising around the Games. Locog’s budget for the Olympics and Paralympics is more than £2 billion.
The BOA’s agreement with Locog was worth £19 million in cash and £8 million in value-in-kind services such as flights and kit. Subsequent renegotiations resulted in Locog releasing an additional £6.5 million, although the BOA continues to complain that it was short-changed.
Critics of the BOA say that it has embarked on an unsustainable expansion programme since 2005, moving to smart central London headquarters, increasing its salary bill from £2 million to £5 million and straying from its core function of managing the Great Britain team at Games time. A failed coaching programme led by Sir Clive Woodward is estimated to have consumed up to £3 million.
The latest dispute relates to the share of any cash surplus made by Locog, which would be split three ways: 60 per cent to the IOC, 20 per cent to the BOA and 20 per cent to grassroots sport in the UK.
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The BOA argues that it should take its cut before the cost of the Paralympics, a loss-making event, because the British Paralympic Committee has a separate agreement with Locog. Under present budgetary projections Locog will not make a profit.
The BOA said: “Our objective is to guarantee that the London 2012 Olympic Games deliver a meaningful post-Games legacy that is beneficial to Olympic sport. This is about protecting the future for athletes, for sport and for our national governing bodies.”
Locog argues that the budgets for the two events are integrated under a vision to end the treatment of the Paralympics as an afterthought. “It is sad that this vision is now disputed by the new leadership of the BOA,” it said.
The IOC said that it would take a “final and binding” decision, expected this month, in line with the joint marketing agreement.